Press Information Bureau

Government of India

Ministry of Finance

30-March-2012 18:22 IST

Portability in Saving Bank Accounts

Damodaran Committee was set up by Reserve Bank of India (RBI) on May 26, 2010 to look into banking services rendered to retail and small customers. The Committee submitted its report to RBI on July 04, 2011. The Committee has recommended that customer should be allowed to maintain the same account number in a bank even when he/she moves to another city or shifts his account to another branch in the same city. RBI has taken action on the recommendations submitted by the Damodaran Committee and in October, 2011 advised Indian Banks’ Association (IBA) for implementation of the above recommendation.

RBI has also stated that provisions of Prevention of Money Laundering Act (PMLA) and Rules do not support account portability between banks as records pertaining to identity of a client has to be maintained by the bank establishing relationship with the customer for a period of 10 years from the date of cessation of the transactions between the client and the bank.

This information was given by the Minister of State for Finance, Shri Namo Narain Meena in written reply to a question in Lok Sabha today.

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Account portability in savings accounts: recommendation for account number continuity constrained by statutory record retention requirements. Portability of savings bank account numbers is recommended to allow customers to retain the same account number when shifting branches or cities. The Damodaran Committee proposed account number continuity and RBI advised banks to implement it. However, the Prevention of Money Laundering Act and rules require the bank establishing the customer relationship to retain identity and transaction records for ten years after cessation, which precludes interbank account portability under the current statutory record keeping regime.